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Tax & Other Tips For A Great Holiday Office Party

By now, you probably have a stack of tax forms from employers, banks, stockbrokers, lenders and more on your desk - or more likely, the kitchen counter. For some of you, those tax forms will end up in the hands of your tax professional (for more on hiring a tax professional, click here); the rest of you will input the information on those forms, box for box, into tax preparation software - maybe with a little swearing along the way. No matter how you plan to do your taxes this year, you likely don't know what all of the numbers, letters and other information on those forms mean. That's about to change. This is the fourth in a series of posts meant help you make sense of all of those forms.

Here's what you should know about the form 1099-MISC, Miscellaneous Income:

A form 1099, Miscellaneous Income, is a "catch all" form. It's used to report income that can't be neatly categorized anywhere else.

A form 1099-MISC is issued for payments made in the course of a trade or business. Personal payments - for personal services like mowing the lawn at your home - are not reportable. This doesn't mean, however, that these services are not considered income and therefore, taxable (they likely are). It just means that it's not the payer's responsibility to report them.

It's also not the payer's responsibility to issue a form 1099-MISC for payments generally made to a corporation, including a limited liability company (LLC) that is treated, for tax purposes, as a C or S Corporation; payments for merchandise, telephone, freight, storage, and similar items; payments of rent to real estate agents; wages and other payments paid to employees (those are reportable on a form W-2); compensation for injuries or sickness by the Department of Justice as a public safety officer disability or survivor's benefit, or certain benefits under a state program for surviving dependents of a public safety officer; and compensation for wrongful incarceration under federal or state law. Fees paid to informers as well as scholarship or fellowship grants are not reportable on a form 1099-MISC. And, of course, payments that belong somewhere else, such as on a form 1099-K, 1099-C or other tax form are not reportable on a form 1099-MISC.

In addition to specific criteria for issuing a form 1099-MISC (outlined below), a form 1099-MISC should be issued if any federal income tax was withheld under the backup withholding rules regardless of the amount of the payment.